Tognum AG / Strategic Company Decision
12.08.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Tognum invests EUR 75 Million in Engine and Systems Production
Continued Internationalization in the Production Process
Searching for New Manufacturing Site in the U.S.
Reduced Currency Risks and Expenses
Continued Expansion of Parts Production in Friedrichshafen
More Production Capacities for Series 2000 and 4000
Friedrichshafen/Germany, 12 August 2008. Tognum Group (ticker symbol TGM,
WKN A0N4PE) continues its expansion trend. The company decided to invest an
additional EUR 75 million in capacity expansion in the production of MTU
engines, LOrange high performance injection systems, as well as the
extension of the MTU Onsite Energy power generation systems during the
current and the coming year. Particularly the in-house production of
essential components for high performance diesel engines will be expanded
and given a more international outlook with an investment volume of around
EUR 50 million. The Tognum Group is therefore currently looking for a new
site in the US dollar region which would initially supply the existing
assembly plant in Detroit (Michigan, USA) with cylinder heads and
components for the production of the successful Series 4000 engines.
Furthermore, at the existing site near Istanbul (Turkey), the first step
will be to set up a manufacturing facility for cylinder liners designed for
the Series 4000. Simultaneously with the installation of new international
manufacturing sites in the US and Turkey, an amount of more than EUR 10
million* will be invested at the existing production site in
Friedrichshafen in order to boost quantities in conrod and crankcase
manufacturing.
Volker Heuer, CEO of Tognum AG explains: 'With these major investment
efforts for the future, we will further increase the flexibility in our
engine production and will be able to further grow revenues from 2010
onwards.' The new US site, in combination with a purchasing offensive in
the dollar region, is designed to have sustained calming effects on the
currency volatility currently affecting Tognum. 'Moreover, in the long
term, we are enhancing our competitiveness, and the production on site will
improve our chances to be awarded major orders with public authorities',
comments Heuer on the confirmation of the Executive Boards plans by the
Supervisory Board. The Tognum Group continues to see strong sales potential
for its broad product portfolio, which is available to 22 different
customer groups in a wide variety of regions.
The Supervisory Board, which had received detailed information on the
planned reorganization from the Executive Board in its previous two
meetings, approved the continuation of negotiations with the shortlisted US
sites and the conclusion of an agreement with the best of those sites.
Board member Dr. Gerd-Michael Wolters, who is responsible for Technology &
Operations, comments: 'The US have a keen interest in the production of
high quality engines in their country. We will be able to start parts
production as early as late 2009.' Plans are currently focusing on securing
suitable premises by the third quarter of 2008, that comes with the ideal
infrastructure in terms of transportation, energy and labour whilst at the
same time offering long-term options for expansion. 'Regardless of the
global expansion in production, we will continue to step up our efforts
regarding our new production logistics facility in Friedrichshafen. Also,
as planned, we will start assembly operations for our Series 1600 during
the fall of 2009 at Lake Constance', Dr. Wolters explains the overall
schedule.
The development of a new engine production site in the US is another
consistent step in the implementation strategy of the Tognum Group, which
was initiated in 2005. Besides the assembly plants in Friedrichshafen (Lake
Constance/Germany) and Detroit (Michigan/USA), MTU also has an assembly
facility in Suzhou/China for Series 2000 engines, and has started a local
Joint Venture in China targeted at the assembly of Series 4000 engines.
Apart from the expansion in the engine business, Tognum Group is currently
investing around EUR 10 million as planned in the 'MTU Onsite Energy' sites
Mankato (Minnesota/USA), Augsburg and Ottobrunn near Munich (both in
Germany): these investments are targeted at the expansion of the production
capacities for diesel, gas and fuel cell based onsite power generation
systems. Another element is the growing component business of Tognum
subsidiary LOrange GmbH in Glatten (Germany/Black Forest area), which is
currently expanding their production capacities for high pressure injection
systems with an investment volume of EUR 16 million.
* Total investment of about EUR 50 million for the worldwide expansion for
inhouse production includes more than EUR 10 million for investments in
Friedrichshafen.
- End -
Disclaimer regarding forward-looking statements et al.
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This report also contains forward-looking statements based on assumptions
and estimates of Tognums Executive Board of Management. Although we assume
that our assumptions and estimates on which we have based these
forward-looking statements are realistic, we cannot guarantee that they
will in the future prove to be correct. The assumptions and estimates, by
their nature, may harbour risks and uncertainties that may cause the actual
figures to differ considerably from the forward-looking statements. Factors
that may cause such discrepancies include, among other things, changes in
the economic and business environment, variations in exchange and interest
rates, the introduction of competing products, lack of acceptance for new
products or services and changes in corporate strategy. Tognum does not
undertake any obligation to update, to review or to confirm the
forward-looking statements or to release publicly any revisions to any
forward-looking statements to reflect events or circumstances after the
date of this announcement.
Investors & Analysts contact
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IR Team / Achim Schneider and Michael Frank
ir@tognum.com
+49 (0)7541-90 3318
Media contact
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PR Team / Wolfgang Boller
wolfgang.boller@tognum.com
+49 (0)7541-90 2159
DGAP 12.08.2008
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Language: English
Issuer: Tognum AG
Maybachplatz 1
88045 Friedrichshafen
Deutschland
Phone: +49 (0)7541 90 3318
Fax: +49 (0)7541 90 90 3318
E-mail: ir@tognum.com
Internet: http://www.tognum.de
ISIN: DE000A0N4P43
WKN: A0N4P4
Indices: MDAX, CDAX, Classic All Share, Prime All Share
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart
End of News DGAP News-Service
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DGAP-News: Tognum invests EUR 75 Million in Engine and Systems Production / Reducing Currency Risks and Expenses
| Source: EQS Group AG